The Future of Making Online Revenue? 179
e4 asks: "Let's see here:
CNET and DoubleClick have patented banner ads. Amazon and LinkShare claim patents on affiliate programs.
The Web essentially has an unlimited supply of advertising space, and demand from advertisers is pretty low, since the average click through rates are hovering around one percent. New products like Junkbuster are coming out all the time that help users block ads completely. Future prospects for ad-based revenue seem precarious. Venture capital may be drying up. The Internet community isn't too keen on fee-based services, and collecting and selling mailing lists, demographics and other bad mojo will get you blacklisted in a heartbeat. So how will information-based Web sites (especially smaller, independent ones) be generating revenue in five years? What will the business model be? Or will these sites just start to wither and die like neglected petunias in Phoenix?"
Micro-payments? (Score:1)
Junkbuster isn't new. (Score:1)
Check your facts. Junkbuster (and webwasher and other such ad/null content filters) has been around since at least 1998, so I'd hardly call it "new technology".
</gripe>
Re:Micro-payments? (Score:2)
Services (Score:3)
You'll also see a few e-commerce sites prosper, while most wither like your petunias.
There's more to the Internet than just the web. I'd look for more ad-supported email digests and mailing lists.
I think someone who offers a service to a particular community might be able to make a go of it with a subscription based section of their web site that offers some truly unique information (ie. information not available anywhere else, not just all the information from everywhere else collected in one spot). You combine that with ecommerce and special support services tailored to that community and you might just have a winner.
The gold rush is over, but that doesn't mean you can't make money on the 'Net or that you can't get rich. It just means you have to earn it, and it won't just be handed to you.
Info sites need not make money (Score:5)
It doesn't matter if these sites can't be profitable. People want to make information available. Over the last 20 years, people have put masses of information up on the Internet without hoping to make money from it. As long as putting stuff online isn't too expensive for an individual to fund with a bit of spare cash, people will always make information available.
The only threat to this is litigation. If a large organisation threatens to sue an individual because it doesn't like the contents of his website, there's not much he can do right now. As the law gets more biased towards those who can afford to litigate, it may mean that these volunteer sites can't reliably hold objective information against the will of a big company. Slashdot can respond defensively to cease-and-desist letters because it has lawyers. Smaller sites cannot risk it.
Profits from making a new interface to customers (Score:2)
I'd suspect that most revenues will come directly from the online sales of goods and services, or indirectly as a form of dedicated advertising by a company providing it's own site. Given the widely known ineffectiveness of banner ads (I've clicked on less than 50 since 1995, and I'm online almost every day) I fail to see the provision of advertising space as a significant revenue generator.
The web provides a very good way of getting information about certain products and services, and allowing purchasing of these. The problem would appear to be selecting products that can be delivered to the customer cheaply. I suspect very few of the companys that are currently losing money on every sale will survive. The markets seem to be very relucant now to give out money to internet startups that don't have a good business plan and a real chance at making real revenue.
Companies can also use their own website to promote offline sales. A website can be a lot more interactive than a brochure. You can provide extra services to entice people back, and at the same time give them information about your products.
This is what I think is the essential point. The interactive nature of the web, and the Internet as a whole, requires something that does more than just sit there (animated gifs don't count, and tend to be annoying and/or automatically ignored). Unlike more static mediums (print and to a lesser extent TV and radio) many Internet users are used to a dynamic experience, and tend to automatically determine if the site they're viewing is of any real interest. If not, they can change to a competing source of information very quickly. If one of the sites I frequent doesn't have what I want, I can skip to another within seconds. In other mediums getting to competing information sources tends to take longer.
Banner ads don't answer the question "What's in it for me" that needs to be addressed in order to draw attention in the long term. Hits are one thing. Hits from return visitors, people who keep comming back, are another.
Revenue Revenue everywhere, and no profit to drink (Score:1)
Company B) 2 Million in revenue in a B2B space hat's projected to expand 250%.
Company C) 4 million in revenue in a portal space that's projected to expand 1000%..
Sound impressive? .coms that will quote these kinds of "exciting numbers" to VCs in order to attract capitol. What does it all mean? At the risk of being to simplistic, it means that:
(this is one of the reasons that the VCs go for products like cars and plane tickets instead of comodities like soybeans or metalica music;) There's no shortage of
Company A) Spends 1/2 Million dollars to buy stuff and recieves 1/2 Million to sell stuff.
Company B) can spend 2 Million buying stuff and recieves 2 million when they sell stuff.
Company C) Spends 4 million on stuff and revieves 4 Million when they sell stuff.
For those of you doing the math ahead of the rest of the class, you know that this amounts to a zero sum gain. Renenue is great, market share is great, but profitability is quite another matter. Jeff Bezoz doesn't mind that Amazon doesn't actually make a profit right now, he's more interested in revenue and share. It's thinking like this that will make 80% of the .coms crash hard.
___
One simple fact (Score:2)
We have to stop thinking in terms of the millions of dollars that middle-men make, and start thinking in terms of maybe no more that 1% of any give price.
Tips (Score:5)
All thats needed is a safe and easy way to leave the occasional quarter. hmmm.
Re:Micro-payments? (Score:1)
The 900 number analogy is quite good.
1) If you don't call the 900 number, you don't get charged. -- the consumer is not ripped off without at least some concept of what happened (unless they are clueless)
2) data processing costs for the sale are quite small.
3) They need on a trusted 3rd party that handles both the money and the proof of consumer transaction
4) They will be abused/misused by the seedier companies. Politicians will have a field day.
5) They will be misunderstood / not trusted by consumers -- at least in the initial phases.
6) They will get bad press, but eventually come to be accepted broadly
There are a few major differences I can think of:
1) Its difficult to subvert the 900 # system since the phone company is the only game in town
2) The micro-payment system on the internet has the potential for truly micro-payments (fractional cent even if desired)
3) micro-payment systems could be set up to be completely anonymous. You could have a micro-payment clearinghouse set up that accepts cash equivalent payments to an account that is used satisfy micro-charges.
why the ads? (Score:2)
Take Slashdot for an example, i'd gladly be paying a buck a month for getting access to those slashdot-news, but that's probably not i the correct slashdot-spirit. However, there's already a few sites doing this, take a look at http://www.digitalblasphemy.com/ [digitalblasphemy.com] for example, providing high quality 3d-wallpapers (some of the featured in Eterm). There's a quite a large number of free images provided by the site, but for a small fee ($25) you can sign up for the full gallery - and you'll get permission to use the pictures on your own webside and alike. This is a great example of how one could make money of a perfectly "on-your-sparetime" website.
Advertisers are in big trouble anyway (Score:1)
Times are a changing (Score:3)
There is going to be a serious shakeout in the B->C sector. Serious revenue models are going to have to be revised as investors patience are thinning. You can't open up a news-portal without seeing or reading about consumer plays burning out of cash
You might see free services, but only a few of the e-biz's in that particular market segment will be able to compete much less survive the outragous valuations and sustain the burn-rate which has been created. They will have to be very creative how they actually sustain their free services.. in the end, nothing is free.
I believe that the real opportunity in the internet is in the B->B->C market... and all the prophetic notions about brick and morter companies ruling the net space in the end, might be true.. as they have a 'Business' to sustain their companies.. not just 'Compaines' searching for investors to help them build a business.
£.02
Re:Micro-payments? (Score:1)
Oh No! (Score:1)
Re:Advertisers are in big trouble anyway (Score:1)
if you're on a modem, banners can destroy the browsing experience - slowness leads to frustration. if you're paying telephone charges then it's even worse.
personally, i think that all advertising should be opt-in. we shouldn't see it unless we ask for it.
--
shift keys? i don't need no stinking shift keys
Disheveled Future - the problems (Score:1)
The problem with banner ads is that they must spell-out the product and establish honest expectation for the user before he clicks. This will never happen because advertising practices are based on persuasion and deception.
The problem with mega-store sites like Amazon.com is that they can be replaced overnight by a fleet of mom-and-pop sites. This will happen when an impartial licensing body similar to the Better Business Bureau [bbb.org] or Consumers Union [consumersunion.org] issues trust ratings for web sites.
The good news is that the power aggregators are wringing their hands behind closed doors uncertain about a future that is, for the first time, unwritten.
Revenue is on the other end (Score:2)
is only one steady service that people pay in
the Internet for - the actual connection.
Be that your provider of dialup, dsl, T1 etc,
you pay your subscriber fee. (Let's not bother
with netzero and such - they will all be dead
before time).
This is where the revenue comes from - as long
as people pay to come online providers are
interested in keeping online going. If the
sites will start to dry up, i am pretty sure
programs will appear to join providers of
connectivity and providers of information.
This in fact is how TV works in some countries -
you pay yearly TV tax and tv studios get their
share. Of course then internet will more and
more resemble one giant AOL with link providers
dictating content. But this has been the case
with every media and this one will conform
just the same.
O well...who cares.
Dirty work. (Score:2)
Re:Oh No! (Score:1)
Extended service (Score:1)
Free as in Beer?
+Free as in Freedom?
-------------------
Free as in Beerdom!
Content only sites are dead... (Score:2)
You can basically get the same thing from a library. It's still very expensive to build a interactive web-site.. as the web goes more towards a ASP style of network and less a brochure and eLibrary..
Hopefully as time goes on the means of creating interactive websites will go down, computers will become more powerful, bandwidth to consumers will increase and cost to host will decrease..
But right now it is a very expensive business.
Re:One simple fact (Score:2)
I don't think people realize how much of society is based upon barriers to entry. But the Internet has very low barriers to entry. This is why there really are no long term huge profits to be made for business.
That's the bad news.
The good news is that everyone Joe/Jane Citizen can make enough for him or her
The Net is the soul of egalitarianism. And watch out, Internet, when those with big wallets really discover this simple truth.
But hopefully it will be too late by then.
Start "Buddying" Websites (Score:1)
You can't click through on TV adds. (Score:1)
I would not like it but companies could also create a full page add that forwards the user to the actual information. I.e. NY Times you go to the home page click on an article link it takes you to an add. page which then after a few seconds forwards you to the actual article.
Just my 2
Regards,
Tim
Re:Tips (Score:1)
Advertising is the wrong model (Score:2)
I wouldn't block ads [taz.net.au] out if they weren't so annoying. It's impossible to read text on a screen with some annoying animation hovering over it.
There are still plenty of ways for web sites to intermediate themselves into the value chain. Say, for example, slashdot started its own shopping mall. Instead of them putting whatever products someone paid to have in there available, they'd have only products that the Slashdot team thought were cool. So long as /. never breaks that trust, people would buy stuff.
What network cards do you guys use? That cool new toy you just covered, where can I get it? Oh looky, I could buy it from the place you linked to but who would I rather trust with my personal details?
Not so doom and gloom (Score:1)
-J
Domain Name Registrations for only $20 [silverscape.net]
You already opt-in (Score:1)
Re:Tips (Score:4)
Actually, one way that normal *hip* places make money is to sell merchandise. People love to wear the logos of their favorite sneaker company, and are willing to pay lots of money for it.
Re:Market Projections (Score:1)
Yes the web reaches new people you couldn't affordably reach before, but the product or service still has to get to the customer, and the logistical infrastructure that companies like UPS and FedEx have spent decades perfecting, has been ignored by many .coms.
I'm reminded of a recent interview I saw that had the CEO of Amazon on stage with the CEO of Lands End. The guy from Lands End went on and on about his companies ability to "Pick, pack, ship and track" more efficiently than anyone else. At the same time, the guy from Amazon waxed poetic about the future and market growth and free bandwidth and wireless and blah blah blah. This is an interesting lesson in how to run a business. Control the expenses under your control, and proits will flow. Don't position yourself in a place and wait for the vaporware to come to you.
___
Should we be so lucky. (Score:2)
But don't bet on it. I suspect "they" will use technology that says "no cookie, no content", and similarly for ad displays. VC may dry up as the new wears off, but commercialization is surely here to stay. Lots of people think it is immoral to let you have anything for free.
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Online revenue, or just money savings? (Score:1)
I feel the way a company will profit monetarily from the internet is through increased productivity. Instead of answering inane questions about a product twenty times a day, this same person can get the product out the door. Instead of taking requests for pamphlets, the customer(or at least a majority of customers) can view the latest edition online. Instead of paying thousands to do direct mailings of these brochures, they can host a website, and mail pamphlets to the minority who don't have access to the internet.
I feel that there will be more cost savings and increased sales potential by allowing someone to fill out an online loan application, instead of wasting a salesmans time walking you through the paper application, when he could be getting a sale elsewhere.
I know this won't 100% eliminate the human contact, but it shouldn't. It should allow the customer to be more pro-active in his search for information, instead of waiting weeks for a product brochure.
regards,
Benjamin Carlson
The sites that will make profit.... (Score:1)
PayPal (Score:2)
Wasn't there an essay on a similar topic called "The Street Performer Protocol" floating around recently? Anyone have the link for that?
Micro-payments are the 900 numbers of the 'net (Score:4)
First, for those readers who aren't in the US: a 900 number is a telephone number that you call and a charge is added to your phone bill above and beyond the normal cost of the call. One good(?) use of a 900 number would be for "pay for service" calls: you call the number and are charged $50/hr for tech support.
The problems with 900 numbers are as follows:
Given this analysis, what risks would micropayments incur on the 'net? Would most sites using micropayments be porno or scams? Would some sites claim to be free, while draining your micropayment account? What about E-Mails containing HTML/Javascript that cause you to access a micropayment site? (What's this charge to "31337 roolz U"?) What happens when you find you've just sent $500 to "Pokemon freinds network"? ( BART! Get your ass in here boy!)
Submitted for your (dis-)approval....
Just like Open Source? (Score:1)
Most people working on an Open Source program do it on their spare time. By spare time I mean time they spend not earning money while using that time. In other words, they actually spend money on it instead of earning money from it.
That's just how it is making and maintaining a web site. It also requires time and money. Therefor one would need to get the money from someone or something else, and advertisement obviously isn't it.
Re:Tips (Score:2)
Consciousness is not what it thinks it is
Thought exists only as an abstraction
Re:One simple fact (Score:2)
This is true in a comparable sense (say compared to getting venture capital to open a storefront, etc...) However there is still many barriers. Not to be an elitist, but let's face it, not everyone can code, not everyone can run a business, and there aren't that many jobs out there for Joe-SixPack that are net-related. I think in the VERY long term you are correct. But we (the U.S. at least) are still heavily based on the service industry. The net simply will not replace this until someone comes up with 1. Reliable Teleportation, and 2. Matter synthesis (a la Star Trek food machines). Then you will you have a true economy upheaval.
I guess all I'm trying to say is that no, not every citizen can make money off the net right now.
Re:Oh No! (Score:1)
current micropayment systems (Score:1)
Re:One simple fact (Score:1)
Simple Answer: They Won't Unless... (Score:5)
The entire everything is free idea on the Net is based around the loss leader concept. Give away stuff to gain market share then make the revenue by exploiting the marketshare. Unfortunately this is the rub, few sites have anyway to make up the revenue lost by undercharging or giving away content or product. This is now being felt by the rash of layoffs [zdnet.com] and also the large number of dead or dying dotcomms [zdnet.com] which include cdnow.com, drkoop.com, toysmart.com, boo.com, foofoo.com, reel.com, apbnews.com, etc. The surviving information/nonE-commerce sites (especially independent or pseudo-independents like slashdot) will eventually have two choices
1.)Get bought out by a larger company who either wants the site for goodwill purposes (AOL owns Winamp.com which never make back the $20 million they spent on it, VA Linux owns Freshmeat, Slashdot and freeCode.com which will make just enough to hold their own or slightly less) or want to exploit the user base in a way the original site could not (e.g. MSN buying Hotmail so that logging out of hotmail redirects you to MSN.com).
2.) The second option is to become like the only sites to actually turn a profit on the Net on information, pr0n. Charge for premium membership and giveaway just a enough to entice members. The Wall Street Journal [wsj.com] already does this with no ill-effects.
3.) The third option is to close down. Which off course is not an option many are willing to make. Of course, if this keeps up the Net will eventually mirror the real world with it's homogenized Walmarts, Starbucks' and Barnes & Nobles' being frequented by the many while independents close up shop and die. Only a short while ago everyone espoused the beauty of the Net and how everyone could be their own publisher but with the death of websites daily (linsight.com, reel.com, toysmart.com, boo.com, drkoop.com, peabody.com, and soon cdnow.com) are we not headed for a Net that is controlled by the few? For instance VA Linux via Andover already controls Freshmeat, slashdot, and a bunch of other frequently visited open source sites and is estimated to draw 50 percent of open source/linux traffic on the Net.
PS: This post is not trying to bash VA Linux but instead is mentioning the fact that already in the real world almost everything is in the hands of a few corporate entities (the same company that sells Marlboro cigarettes sells Post Cereal and Kraft foods, Disney owns ABC television and Miramax films, AOL owns CNN and Time)and the Net was supposed to be haven away from that where opposing views and opinions were only a mouse click away. I am not sure we should be celebrating the death of that...
Re:Content only sites are dead... (Score:1)
Maybe *you* can. But *I* can't. My library is in a small town consisting mostly of (apparently) little old ladies who like Maeve Binchy. Nary a book on, say, quantum computation.
"It's still very expensive to build a interactive web-site..."
It's also very expensive to create an entire operating system--but people do that for free. In any case, I don't particularly like "interactive" websites. Unless you count basic search and navigation as interactive.
"...as the web goes more towards a ASP style of network and less a brochure and eLibrary..."
This is a circular argument. If/When e-businesses start failing, the web will move back towards content.
"But right now it is a very expensive business."
But it doesn't have to be. If business people could get it through their pointy(-haired) heads that you don't need (or want) to put all your eggs in one server room, they could save a LOT of money and aggravation.
But that's beside the point. The point is that individual people have (and will, if allowed) provide much the same information on their own dime, for the love of it.
--
Compaq dropping MAILWorks?
making ads glitzy (Score:1)
there is a free ISP over here in Australia called goconnect.com. While I personally don't use it, a friend of mine does and says its great. I asked about the advertising and he said he really liked it -- they were popup ads every couple of minutes which were more like TV ads then web ads.
So maybe this is another approach? I mean, TV/radio ads are all about being completely stupid and glitzy and unexpected, whereas your average banner ad is very much ho-hum. I notice some sites doing sort of little pop-up tv-like ads, and now that high bandwidth connections are becoming more ubiquitous, maybe advertising ability on the net will catch up with the advertising promise of the net.
Peer-peer (Score:1)
Hmmm, whats that number? (Score:1)
Re:Advertising is the wrong model (Score:1)
This might have the inadvertant effect of relocalising commerce. Most people would prefer to shop locally with a company that they know and trust, but recently have started spending more at the multinationals because they are cheaper. If the internet allows small companies to cut the price gap again then customers would be tempted to shop locally again because of the service benefits. This is especially true when dealing with specialised or non-comodity products where the added value that a local dealer can provide in terms of service or the ability to provide customisation based on exact knowledge of the customer's requirements can easily outweigh the price benefit of buying from the big boys.
For example, I bought the computer I am now using from Dell about 15 months ago because they were well priced, allowed customised orders and had a reputation for good support. However this was when I was looking for a commodity PC. pretty standard configuration, and running Windows. If I were to buy a PC today I would use one of a couple of local companies that supply pre-configured Linux machines because they have expertise that I don't, and if anything went wrong then I could call the guy that built the machine and fire questions at him.
Despite all the hype about the internet enabling large companies to build customer relationships I am sceptical. Dell were extremely professional when I used their support service and provide a model of how it should be done by big companies, but despite this they can't compete on service against companies that know the names of their clients' cats. And they definately can't compete against companies that and can remember supplying a new keyboard a few years back after the aforementioned cat decided that the keyboard would make a good toilet.
sponsor pages (Score:2)
Re:Content only sites are dead... (Score:1)
Re:Micro-payments? (Score:1)
http://www.useit.com/alertbox/980125.html
Re:Revenue is on the other end (Score:5)
In the beginning, there was no writing, and information was transmitted orally, if it was transmitted at all. Talk about loss-ful transmission.
Then there was writing. Of course only a few people could read or write, and they were the kings and the priests. Books had to be copeied by hand, and were thus quite expensive. A single man could very possibly own a copy of every book in existence in the west, and read them all in his lifetime.
The printing press made "transmission" of information cheap enough for people less rich than kings and priests, and so reading and writing started becoming commonplace. Not coincidentally this was also the time of the Enlightenment and the birth of modern ideals of democracy and liberty.
Then came radio and TV, and transmission of information once again became the property of a privileged few. Now "the media" had always existed in the form of newspapers and pamphleteers (and town criers) but not since feudal times had this much power been concentrated in the hands of so few.
TV, meet cable. Same one -> many transmission model, but a lot more choices and a lot cheaper. And don't tell me there aren't choices: The Food Channel, the History Channel, the Discovery Channel, the Jesus channels- if there's enough demand, there's a channel.
And now, while good, innovative programs are popping up like mushrooms on cable, the Big Three are pumping out more and more desperate trash like "Survivor" and "Millionaire" to revive their old magic. Of course it wasn't magic, it was monopoly.
And finally, the Internet. Like the printing press, it's a publishing/transmission system open to anyone who can afford it. And due to technological advantages, it's so cheap that in many cases it's free.
And if there's one truth that the history of cable tells us, it's that people want targeted content, even if the quality is a little lower. Sure, network sitcoms had better actors and production values than a lot of the early cable stuff, but the cable programs connected with their audience better. The net takes both aspects of this to levels much higher- in many cases the quality is abysmal, but there's so much of it you can find what you need.
My only fear is that the AOLs of this new media world will try to control this ability to self-publish by making the process more difficult and expensive. But I think that people like the freedom of the 'net too much, and will leave services that limit what they can see too much. This won't happen overnight, but it will happen over a period of years. Have a little faith.
Revenue? I see psuedo-networks with voluntary micro-payments as one of many possibilities. Sites that can build good communities will eventually find ways to monetize this with sponsorships, merchandising tie-ins, and so on. It is now still a lot cheaper to run a website than it is a magazine, newspaper, or professional sports team, all of which, mind you, are supported by advertising dollars.
-cwk.
Revenue? Is that like .. umm .. "money"? (Score:1)
Sorry if I seem a little uninformed - I've been too busy living in my get-everything-free-perfect-utopia world to understand this concept of "money." Oh, by the way, could someone give me some food? What? Pay
Inefficiency of Banner Ads (Score:5)
First of all, advertising effectiveness is one of THE hardest things to measure in the field of business. There's no clear way (currently) to measure how 'good' your ad is. Sales, especially in consumer products, are influenced by many other forces (media, store promotions, seasonality, etc.). Ad executives already know that if sales for their soft-drink jump 15% while they are running an ad campaign, that it doesn't necessarily have anything to do with the campaign. Now, with the interactivity of banner ads, some people think that advertising can be "figured out". Guess what. It can't. Click-through rates do not mean I was interested in the ad. A click-through rate means I was interested in the ad, but it doesn't mean I was interested in purchasing the product. Maybe I was just clicking ads to support the website (I do that with smaller websites). Or maybe I clicked on something that looked like content by mistake (take a look at the side columns on the front page of Sharky Extreme [sharkyextreme.com]). People need to realize that click-through rates aren't a good approximation of wether or not the advertising was succesful. Yes, it may be "the best estimate," but trust me, it's not a very good one.
I also think that this 'click-through' mentality has created a lot of bad advertising ('Click on he Monkey to Win $20'). In order to have users click on ads, they throw in every possible gimmick that's in the book: animated GIFs, Java applets, sounds, etc.). As a firm, I would rather have a banner ad that informs, rather than entertains. If it can entertain while it informs, that's not a problem. But I'm still amazed at the number of banner ads that promise something ('Speed Up Defragmentation and 10 Other utilities!'), yet the ad itself never shows a brand, or a webpage. I'm not going to click on an ad to find out what it's about, that's something the ad should do. And if it can do that, it's done SOME service to the company or product it is promoting by increasing brand awareness.
Oh boy, now I'm way off-topic.
I think the Internet is going to stay, for the most part, free. As long as the service you are looking for can be found free on one site, you can go there. As long as /. keeps the site the way it is (free speech, free beer), I'm not going to any other site that wants me to pay for it's information. And when all the sites suddenly start charging, there's very little that will keep someone from making a free site of their own to steal customers.
More importantly though, I don't think a lot of sites will be able to migrate to pay-per-view or a monthly charge, at least not for a lot of their main content. Once someone is getting something free, they're not too likely to enjoy paying for it (some exceptions to this case exist, obviously).
If you've come this far and understood what I said, I applaud you. I lost myself after the second paragraph.
Re:Revenue is on the other end (Score:1)
I agree that ISPs are currently in the best position to lock in the additional revenue needed to survive as content providers.
Advertising will grow up (Score:2)
Banner ads could be served from the site itself. And they could be made to fit better into the layout and philosophy behind that site. This would bring two things: Banner ads would be less intrusive, and, they would be impossible to block. Both the advertiser and the consumer wins here. (Uh, beware, I see the win-win scenario emerging here)
Companies that today make a living of serving (and accounting hits for) banner ads, will have to find a new living. But the new model should open up for that just fine. There will still be a need for the advertiser to have some figure over the effectiveness of the ad, now that there's no longer to usual third-party involved.
There's still a third party though; the consumer. Most browsers can supply the advertiser with referrer URLs, which would give the advertiser a way of assessing the effectiveness of an ad on some specific site. The advertisers would probably like ways to verify the number of actual exposures of their ad as well. This is where the old ad-serving companies come in. If they figure out a way to act as this third party that can account and verify the number of exposures, they may not be completely out of business after all.
Isn't it wonderful seeing this marketplace mature
Re:PayPal (Score:1)
Here it is. [counterpane.com]
1% click through seems pretty good... (Score:2)
They should be realistic. 1% is pretty good! (Score:5)
Recently a bunch of Japanese manufacturers, rivals even, got together to promote a single lifestyle brand. Why? Because even though consumers remember their individual/competing ads, the consumers still don't remember what the brand was! Heh, ironic - I can't remember what the shared brand is! (But I'm not in Japan tho, so I haven't seen _any_ of the ads).
In my opinion, the "low rate" of click-throughs is not surprising. Advertisers should realise that people have lives to live, other things to do. When we watch a movie on TV, I bet that more than 99% don't really care about their ads, brands or products. Sure we may be mildy entertained by the ads, but that's about it. At best it registers subconsciously, so the brand will be _familiar_.
With click through banner ads, advertisers finally are getting a good idea of what consumers think about their ads and products. And face it, we don't care that much. Advertisers: Wake up! Your products aren't the be all and end all of our lives. Deal with it. When I wake up in the morning, it's not a 10% chance that I think of product ABC. It's not even 0.1%.
So 1% is pretty good for click through. Sounds high even. What were they expecting? 20%? Get real. As if one in five visiting a.website.com are looking for computers/printers/plush toys/etc. Doh. Most of us are visiting the website because of _the_website_ right?
They should be thankful that 1% of us are actually _clicking_ the ad. They better hope it's not because of sympathy, or begging from the website owner.
And if they keep trying that webtracking stuff, it's going to make it more difficult/expensive for them.
Cheerio,
Link.
Re:Inefficiency of Banner Ads (Score:1)
This is best-case, though. More typically, they tend to rule out anything they can't measure. My field is wireless billing, and I've seen many marketing campaigns over the years try to either sell phones, sign up subs or get subs to generate more minutes through different types of promos.
I can tell you that many times the execs focus on the short-term revenue numbers as a direct barometer of the success or failure of a particular campaign.
"The 'get your grandma a phone' campaign has failed miserably! This month's revenue compared to same period last year is up only 1/2 a percentage point!"
"Er, but the net sub adds are up over 20%? I think the program was wildly successful in getting subs to sign up, but it is the wrong demo because grandma's leave the phones in the kitchen drawer."
"Go away, you are bothering me with useless statistics (translation: my bonus is contingent on an un-achievable revenue goal of 300% last year's!)"
A little of topic (Score:1)
I live in Cincinati, Ohio, and am trying to open my own Computer business. I'm 14 years old, and am basically trying to get some money for a 1ghz athlon I want. What I want to do is order parts from a Wholesaler in California (www.DeeOneSystems.com) build custom computers, and sell them to how a person requests they be built. The only thing is that I can't think of a name for my business. So Far I have Custom Computer Creations (but that sounds like a CAD company) So I was hoping everyone could give me some suggestions.
Thanks
Re:Tips (Score:1)
Guilt and generosity is a powerful weapon the first time it employed in any medium, but with the shortness of modern society's fuse, I'm afraid apathy will crush this "online idea" within less than a year. Society is not as generous as it used to be. MP3s and a lot of open source programs are downloaded without second thought. Have you ever bought a full album after "sampling" a MP3 or ever made a donation to a Linux distribution? (Disclosure: I've donated to Debian before.) Buskers, or street performers can make quick change, but they have to move place-to-place, therefore seeming fresh. Website's can't.
Viewers will tip perhaps the first time they visit a site, but how long can tips alone sustain a website? Some will point out that open source software is an example of a system being successfully sustained by donations, but the truth is, open source is a community movement? How many "Slashdot's" are out there on the net can endow one with a sense of belonging to a community and thus invite generosity?
The lesson here is, I'm afraid is that the information age in hand with a capitalistic society has created a paradox where a majority of non-profitable or communal Internet sites (i.e. sites not selling products or services) must have funding via advertising to survive. Yet at the same time, this information age has also flooded society with so much information and pleas that apathy to both advertisement and donations are ignored without second thought. It's a wonder this is all still up and running.
Worth paying for. (Score:1)
Re:Should we be so lucky. (Score:1)
Lots of people think it is immoral to let you have anything for free.
Which is where TANSTAAFL came from. What they miss, however, is who's paying. If I pay, it's free for you.
This brings out a central point of the Internet: it does not need to make money to survive. If businesses can't use it to make money, that's too bad. In the real world, a large percentage of businesses fail; why should the Internet be any different? Some will say you get a larger audience, and you do, as long as somebody knows it's there. But you also get larger overhead: more fraud and more shipping costs. The costs of the servers and warehouses (if you get popular enough) make up for not owning a storefront. Finally, there's the problem of rapid changes in demand.
Like free software, the Internet is just an alternative business model. It will never replace real-world business, since e-shopping can't give a good sense of quality of goods. You can do anything with Photoshop and enough money. Also, it's too hard to comparison shop on the Internet; as a programmer, I refuse to trust a bot... even if it wasn't written by MS.
-- LoonXTall
You can make money if you don't _spend_ too much (Score:2)
gazillions bucks to make theit site great and that advertising will cover the costs. That's the problem. Creating a Web site doesn't necessarily cost so much. Take Slashdot for example, it started easy, with a few guys having a neat idea and doing some great coding, then it started to become more and more popular, and is now what it is. I'm might just as well be plain wrong, but I believe that Slashdot is generating money. I have a small web site myself (that only costs me web hosting and a few hours of work a week), and I hope to be able to win a bit out of it eventually (pay a rent, maybe?). It won't be a lot, but my point is, it is possible to make a site whose revenues are higher than its costs if you design it without aiming too high right away and without necessarily blowing away hundreds of millions of dollar, like some shity startups do.
In the future... (Score:4)
With so much porn to choose from, the quality of the porn should go up and the sites with the best porn will be able to charge a premium for it. Slashgoatporn.org might well be one of the highest grossing web sites in the future.
Re:1% click through seems pretty good... (Score:2)
One of the most effective banner ad techniques was the little banners that look like a Windows error message with an "OK" button. They get about 10x the clickthrough of other ads, maybe more. They get an *astounding* rate of clickthrough.
And *no one* ever buys anything. People who come in through ads like that, if they go anywhere, go looking for contact info. Most just back out of the site. Most never come back, under any circumstances.
Click through, alone, is a poor measurement.
No sweat. (Score:2)
No sweat. Moving elsewhere (that's everywhere) where software & business plans aren't patentable will just do the trick.
--
Here's my mirror [respublica.fr]
Re:PayPal (Score:2)
Re:Micro-payments are the 900 numbers of the 'net (Score:2)
But say, you go to GoodSite.com and you feel the information is good quality, you get somthing out of it, and so because your a nice guy/gal you ring their (hopefully subtely) listed 900 number, which has a max cost of $1. This is a tip and maybe you give them a dollar every week, or every time you are particularly impressed. Obviously it cannot be mandatory, but I think enough people would be courteous enough to make such a small donation every now and again (after all its not mandatory to leave tips in restraunts..is it? I dont konw, I'm in Australia:)
As for the problems with 900 numbers:
1. This is n/a because it is a tipping service not a mandatory payment, the pr0n sites etc. already have their methods.
2. This I see more as the users responsibility, if they can't control their kids thats their problem. Plus childrens sites would obviously not have the tip mechanism in place.
3. I dont know about 900 numbers, but in Australia they are either 1-500 or 1-900 and you *know* your gonna get charged alot. 1-800 is always free. And maybe there could be a compleatly new number which everyone knows can only charge 1 dollar maximum per call.
Of course there would also be applications for bands releasing their music as mp3's, they only make 20 cents a CD or somthing as it is don't they?
____
I'm not so sure this is the end of ads... (Score:2)
I'm not so sure that banner ads are as dead as people think, nor are the revenue streams that they create. Lemmie provide a couple of examples:
While not a banner, this is a good one: right now, I just bought 660,000 ad impressions from a game related newsletter with a subscriber base of 220,000 people (everyone gets to see the ad three times.) Normal banner advertizing doesn't really get my attention - but, this newsletter is for people who are seeking out reviews for games, and special deals on games. Instead of being a 'blanket advertizing' campaign where I just start spending money at random trying to generate sales, I picked an area where people are actually LOOKING for things like contest, reviews, special offers, etc - IE, where they are looking to spend money. Targeted advertizing actually has a much better success rate - something that I figure that more and more online-world services and sellers will finally take advantage of.
While websites focus on general areas of a topic (for instance, /. focuses on the geek crowd, or what CmdrTaco & C. want to post, take yer pick ;-) advertizing based on that topic is still iffy. Just because someone is a geek, for instance, doesn't mean that they happen to be looking for a new Linux based server - which means any ads for new servers that reaches that particular person are pretty much a waste. In the articles themselves, however, it's much more focused. For instance, an article on MySQL & Perl would be a good place for someone to advertize a hosting service that allows MySQL, Perl, PHP 4,0, etc. You are more likely to reach your target audience. I look for more websites to start going that direction - allowing for very focused advertizing which allows for a MUCH better bang-for-the-buck.
More advanced profiling technologies, checking to see if they have already seen an ad (based on cookies), etc. will probably help the ad dollars thing. Keep in mind - while TV & radio commercials work sometimes, the same can be said about banner ads - they work sometimes. Content, how catchy the subject it, how well focused the ad is, etc. all makes a huge difference on the number of click-throughs you get.
Are ads annoying - damned straight. Some of them have been going way overboard anymore (Java and Shockwave based ads are really annoying). But does this really mean the end of ads online? I doubt it. We'll just start seeing ads that are reaching the right target group more often.
And personally - I really hope these revenue streams don't dry up. It would be a pitty for so many news sites that get so many hits to just die away.
(PS: When I released my last game, Boulder Panic! 2, I put a link at the bottom of my .sig. It wasn't advertizing for me - it was just showing off that I actually accomplished the task :-) BUT - do you have ANY idea how many people clicked on that link, and went and checked out my game?! 1% clickthrough may be right, but, even then, 1% somedays can really make a difference!!!
Re:Micro-payments are the 900 numbers of the 'net (Score:2)
Re:Profits from making a new interface to customer (Score:2)
On-line catalogs are quite effective, especially when your inventory changes rapidly. A friend of mine has had a business selling surplus sleeping-car parts (yes, there is quite a market [aaprco.com] for that), parts that he acquired while scrapping some 60 surplus sleeping cars over several months.
Well, he had an almost "real-time" catalog, showing the parts he had available, complete with pictures, he would get different kind of parts as he would work with different kind of cars, and that online catalog accounted for well over 90% of the sales he did.
There was no way a paper-based catalog could have coped-up with the various changes that happenned. In fact, whenever somebody asked him for a paper catalog, he would simply print the website and charge $20 to mail it to the prospect (subject to discount on the first purchase).
In fact, he got several of his customers getting wired (people who would not have thought about even touching a computer), as they found out that it was far more effective and hassle-free to go online...
--
Here's my mirror [respublica.fr]
Re:One simple fact (Score:2)
Not true. A friend of mine (about whom I talked above [slashdot.org]) would never had prospered if he did not had an online catalog. And yet, he was the unlikeliest guy to get connected; a retired railroader who also owns a tavern, he instantly saw the Internet potential and he was quick to harness it to his advantage.
Just like any small-business owner who asks a plumber to do some plumbing work, he hired some coding kids to do his website and everyone was happy.
--
Here's my mirror [respublica.fr]
related careers (Score:2)
I've been thinking about how to make money from web sites lately, largely due to two fairly different sites I run.
First, there is olist.com [olist.com], a site for people interested in Objectivism. I've been running some variant of this site since something like early 1995, without ever directly making a dime. But I did make money indirectly; I learned HTML in creating the site, which landed this poor philosophy major her first programming job.
In a month or so, I'm going to embark on a major project to create a new type of community-moderated "mailing list" through the olist.com [olist.com] site. I'm going to ask people for "donations" (non-tax-deductible) through PayPal [paypal.com], to compensate me somewhat for my time. I'm hoping that Objectivists, of all people, will be willing to pony up to have a high-quality discussion list again. (I might also be able to sell the software later, which would be great, as I'm sure donations won't even remotely cover the cost of creating the software.)
My other site is GeekPress [geekpress.com], a tech news site. After creating the site, I realized that advertising and affiliate programs aren't going to cut it. Why? Banners suck. They suck up space and bandwidth. And their long-term viability as a source of revenue is doubtful. And affiliate programs just don't make enough revenue, unless the site is directly related to what's being sold (like my Nathaniel Branden site [nathanielbranden.net]). So, I can ask for donations. Yeah, right.
But there is hope. Perhaps GeekPress [geekpress.com] can, as my Objectivism sites did, propel me into a related career. I have a strong background in analysis, writing, and public speaking from philosophy. I have, through maintaining GeekPress [geekpress.com] (or more precisely, by reading so much tech news that it makes my head spin), a pretty good grasp of where technology is headed, particularly given our legal and cultural climate. And I have noticed that people seem hungry, given the relentless speed of technology, to make sense of the changes happening as a result of new technology. So, if I can manage to spin out engaging and insightful analyses of tech news to be published elsewhere, I might be able to make some money. And that money will be, somewhat indirectly, the result of my work on GeekPress [geekpress.com].
I'm sure that this "related career" model doesn't work for every free site out there. But it has surely made many a site developers a great deal of money, even if they don't quite realize it.
-- Diana Hsieh
Re:The Old Fashion Way. (Score:2)
If you can remember the name of the vendor, try http://report.andover.net/cgi-b in/ad_current_ads.pl [andover.net].
Re:You can't click through on TV adds. (Score:2)
Who hasn't seen the VA Linux adds on slashdot
I haven't seen any advertising on slashdot. The combination of not loading images, and running the junkbuster proxy, is very successful.
Think about the value add (Score:2)
Nothing new or novel below
I think that the (consumer based) sites which are going to make money online are those which fall into one of the following categories:
1) they provide a superior way of performing some sort of task (i.e. online banking or news feeds)
2) they provide an equivalent service but their market segment is composed of "tech savvy" people - e.g. computer components suppliers.
3) their site provides an integrated discussion/community area and goods purchasing forum (i.e. online building suppliers with an associated DIY site).
4) they can genuinely offer savings over traditional stores, something which (once you factor tax breaks) only a few online businesses actually achieve.
Some sites fall into several of these categories - for example I would say that Amazon fulfilled almost all of them:
* you can search for specific titles rather than having to physically hunt through the shelves
* the ratings and suggestions systems make it easy to locate new books
* I suspect a significant amount of their business is in computer literature.
I'm a very long way from convinced that an online shop which is just "online" will ever be particularly useful for a small business. Consumer hubs and price comparison services make it very difficult for a small business to actually generate very much interest in their site let alone generate many sales, and what many
Like I said you have to add some value with your site if you want it to make money - and I think that this is what the VC community is just waking up to - of course I'm not a VC so maybe that's just an impression from the media.
Other people in this discussion have talked about tipping sites or selling very low ticket goods, the problem is that presently (in a distributed environment) its not very easy to process those small amounts. Online payments really need to be authorised against something or the fraud risks become enormous - now this is either by using a traditional bank account which incurs minimum authorisation charges (typically around 5p which makes truly micro payments impossible) or against some form of online stored value system (either developed as part of your site or externally i.e. Beanze).
However micropayment solutions are still a long way from pervasive and I'm not sure if consumers are really interested - people like to have a single account that they keep track of and having to occasionally charge a separate online account seems like something of an overhead - perhaps if the account was set up with a direct debit so that your online "charge" was transparently topped up when required it would be easy to use - but then you run the risk of huge bills being generated if the architecture is compromised.
In short I'm not convinced that micropayment based revenue is going to be practical within the next few years - I'd be happy to hear different but I just don't see the social or economic hurdles evaporating.
just thoughts
Tom
PayPal, Storytellers' Bowl (Score:3)
Now that I think about it, I sort of wish I could put a tipjar on some of my Themestream articles [themestream.com], like the one about Jon Katz [themestream.com], but I think that might be a violation of contract or something. But at least they pay me a dime a hit, and they don't seem to have any banner ads so far (I imagine they might add them once they get out of their trial period, though). (That's another way individual authors, at least, could make money off the web, I suppose...)
Another interesting new model built on similar ground to the Street Performers' Protocol is the Storytellers' Bowl [storytellersbowl.com], which is going to accept PayPal and publish stories on a supported-by-patron-donation basis. I'm really looking forward to its launch.
And by the way, for whoever wrote the copy quoted in the story blurb--Junkbuster isn't new; it's been around for several years at least.
--
Merchandise (Score:2)
--
Web Should Follow TV (Score:5)
The only way to get ads to work online is to bombard the consumer, not just have these puny little banner ads. Maybe have branded web sites, like Redhat's User Friendly, or Mountain Dew's Slashdot, where ads are integrated with the content. Imagine:
Posted by Hemos
SomeGuy writes "check out these new low power Intel chips, they're hella cool!" Wow, that's almost as refreshing as the caffeine packed Mountain Dew that I'm drinking right now.
This could easily be accomplished with something like the askjesus.org filter, so that existing web sites don't have to be changed. As long as the user isn't presented with any alternatives, they will have to expose FNORD! themselves to advertising.
Mark my words, the web will become a uber-capitalist wasteland in 3-5 years!
I don't remember any banner ads on any Gopher sites...
The web amplifies the stupidity of advertising (Score:2)
Adverts don't have to be the only model (Score:2)
--
Re:One simple fact (Score:2)
Indeed. Contrary to conventional opinion about the free market being an apologia for exploitation and massive profits, Adam Smith consistently maintained that profits were proof of inefficiencies and/or market breakdown, and in a perfectly free and efficient market profits would be zero as all products and services would be priced at exactly their cost of provision. As the Internet is the freest and most efficient market ever created, profits to be sustainably extracted from it will inevitably turn out to be lower than in any other portion of the economy.
The wild card here is that the underlying technology is improving so fast that new ecosystems arise out of nothing constantly, and the colonizers of these new ecosystems extract the windfall profits that successful pioneers always do. To date this has almost completely masked the underlying efficiencies and therefore lack of long-term profitability, but sooner or later it will become obvious.
Conclusion: Ride the wave, sell out early
Online Business == Meatspace Business (Score:2)
A solid business model is the key. If the company is trying to make the business work, rather than cashing in on the "dot-com" frenzy, they will survive. Nobody but Yahoo or C-Net can make money on advertising.
As an aside to this: In my last round of looking for work, I received three offers; all three from start-ups in Menlo Park. I chose the company that, to me, had the best future. The result: The company I work for now is the only one of the three still in business. We will be going public later this year, in spite of the stock market dry up, as we have solid business practices and offer services that bring value to customers.
It takes three years to establish any business... (Score:2)
1) Goodwill sites. Those are sites which are run at a loss by a company who is interested in some form of good will. In this category I would lump sites like
2) Service sites. These are sites which provide a time-saving service or provides a service which would otherwise not be available by going to the local mall or grocery store. In this category I also lump merchant sites: as the fascination of merchant sites has declined, all that is left is the service of obtaining difficult to find or difficult to obtain merchandise, usually for a premium. In this category I would include sites such as Amazon, Fatbrain, and HomeGrocer. (Amazon and Fatbrain provides the service of allowing us to quickly find otherwise impossible to find books such as programming or technical books--but at a price that is, in the end, about a buck or two more than if you could have bought the book at the local bookstore. HomeGrocer provides the service of home grocery delivery--but at a price that is, in the end, about 5% greater than buying the groceries at the local grocery store. HomeGrocer is a reasonable example of this because, as you order more and more products, a "favorites" list is generated that allows you to quickly, in about 5 minutes or so, reorder those same products--a typical grocery shopping pattern. So the service HomeGrocer provides is delivery and time savings.)
If you are a merchant site and you are not providing a valuable service beyond shipping crap to someone, or you're the on-line version of your regular catalog (such as Victoria's Secret's on-line web site is simply a browsable version of their catalog), IMHO you're doomed to failure.
On the other hand, if you do provide a valuable service people are willing to pay for, you'll do well just as long as you remember the "three year rule." The three year rule, which everyone in this "modern, faster than the speed of light web world" where time appears to be measured in negative dog years, is that no matter how good your business is, it will take three years to establish a solid clientel. For some reason or another, perhaps because they were blinded by the shiny bobbles of web technology, otherwise intelligent businessmen thought they could start a web commerce site and establish clientel in 2 or 3 months--and that just does not happen. It takes three years to establish a business, no matter how good you are, if only because it takes three years for people to get used to using your service. That most web companies don't last half that long speaks tons about the short-sightedness of the people who run those companies.
3) Closed-network B2B sites which in an earlier era would have been done using a mainframe coded in COBOL and a bunch of VT100 terminals. I'm currently working on such a site. The site is structured as an eCommerce web site, but from the business model perspective, all we're doing is bringing out the business's existing database system to the web in a password-protected web site which permits their partner companies to connect and order product.
Of course the one group of people who will make money in the future of eCommerce is the programmers and software tool developers who are helping to build all this stuff. Just so long as you negotiate a good contract that doesn't screw you up-front so you can be screwed when the company founder's hair-brained idea doesn't generate a multi-million dollar IPO.
Re:Should we be so lucky. (Score:2)
You get sane design like this when your "Team of Geeks" who built the site are sensitve to privacy issues. The best of both worlds.
Unfortunately, I can't give you the url, as I am sensitive to MY privacy
one domain controls advertising (Score:2)
Let's say that one domain, or even three or fifty controlled all of the advertising on the Internet due to patents. While junkbuster is a godsend, no third party software is going to stand up to the simplicity of simply firewalling these offending domains.
Internet advertising relies on the same things as distributing DeCSS: A massive distribution of the ad content so that it becomes hard to block it.
Already, I've been bitching at the sysadmin at work to firewall incoming traffic from doubleclick.net; these guys have got a ton of traffic coming from that one domain, and none of it is useful to us. Furthermore, I know a lot of sysadmins who ALREADY block doubleclick.
Why would anyone answer? (Score:2)
In other words, this entire thread is a red herring (not the magazine, though that is a red herring too, literally speaking, ironically enough). I wonder how many journalists scrum through this stuff for "insights".
Re:PayPal (Score:2)
But as for PayPal [paypal.com], I can tell you right now they must be making scads of money off the thing. PayPal's one of the most popular auction-payment services ever...which means a whole lot of money is passing through their coffers every day. Do you think they don't float interest off of that money?
Furthermore, they just introduced a "business account" system, where they provide additional services to those who want them, while taking up to 2.5% of those transactions. They were certainly attractive enough to be bought out by the X.com [x.com] full-service Internet bank within just a few months of their creation.
Trust me on this--banks have little tricks of making money off of things that would cause you or I to scratch our heads. They wouldn't be providing this service if they didn't think it would make them a bundle.
--
e-gold for web busking (Score:2)
E-Gold:
-is up and running (unlike almost everything else)
-is internationally available (unlike PayPal), and supports conversion to and from several currencies
-needs no special software to either send or receive
-charges small transaction fees (1%, to a maximum of 50 cents)
-can be used for micropayments
-supports a form system, so you can put a page on your site where people can both pay and leave a comment
-is easy to fund (for example, this place [goldnow.st], lets you fund your e-gold account with your credit card; slower methods are cheaper)
-is free to sign up for
However, it works in precious metals (gold, silver, platinum, palladium), not cash. Personally, I prefer this (though I trust silver to retain its value more than the others). If you don't trust precious metals, you can always just buy it as you need it, and OutExchange (have them send you a cheque for the current market value) whenever you have more than you intend to immediately spend.
I'm not sure I trust it for pay-for-view pages, but it certainly seems adequately secure for donations (as long as you pick a good password, and use a web browser with good 128-bit SSL). It also seems to be quite private, though it doesn't support truly anonymous payments.
Go sign up for free. [e-gold.com]
Feel free to tip me for this valuable info
I'm account # 134343
Re:Simple Answer: They Won't Unless... (Score:2)
Since the days of gopher servers, archie, and the Internet Hunt, the net has offered an amazingly useful and revolutionary resource for giving people access to information. This process took a quantum leap forward with the appearance of the Web, and we've only seen the beginning.
The next phase will see a layering of additional layers of usefulness atop the substrate of the Web. The creation of compelling information products using the net will continue to become easier and cheaper.
In the meantime, the clueless who came storming in from whatever failures they had engineered in other industries, who started slinging a few buzzwords around and got tens or hundreds of millions of dollars in funding from greedy investors, are turning belly-up as it becomes clear that their sites are uninteresting, or unusable, or just plain stupid.
Good riddance.
Micro-payments avoid high transaction costs (Score:2)
And the problem is? (Score:3)
Look, let me sound off from a probably-not-unusual position- I am a dotcom. Literally- I have 'airwindows.com', have had it since May '98, and that's where I keep my stuff. I have linux XPMs there, and some desktop pictures, and actually stories and novels I wrote (well, one finished novel and two unfinished). I have the software I use to remind myself what's going on each day, and the software I use to generate the site from a bunch of flat-text files, and I have the GPLed source for the programs.
I pay $45 a month to my ISP for this plus my dialup account. Some of that is extra megs of space at about $1 a meg- you can see why I turn to mp3.com for my music ;) but the site is not ABOUT paying ME- _I_ pay for it, because I want it to be there.
Where is the need for ads, for micropayments to force any readers of my books to cough up a halfpenny for each chapter? What the hell? I don't get this. If you have a barbeque for your family do you charge each kid a quarter for the extra cooking you do for them? If you go down to the town swimming pool and take pleasure in doing fancy dives or showing people how to do the backstroke, do you then charge them a nickel? There is something crazy wedged into the collective unconscious about this sort of thing, and this talk of micropayments really, really highlights it. _WHY_ is it a given to some people that if I write little poems and put them on a web page, I must therefore be in favor of billing people a penny to see each one- and flaky or 'amateur' if I choose not to? This is nuts, just nuts.
(p.s. first 200 karma! woohoo! yay! and there was much rejoicing! Quick, somebody moderate me down and make me go "Wauuugghh!" as I get dragged horribly _back_ _under_ the double century mark! let's have a war between '+1 Funny' and '-1 Fscking Karma Whore!' moderations! *hehehee* do yer worst, I just laugh at all that anyway :) I promise if I get a '-1' to make a followup post saying 'waugh!', hit me :) )
Re:Merchandise (Score:2)
www.pix.com is one. Mugs, mouse pads, all kinds o stuff. crowded market, www.mymug.com use too as well, but they seem to be gone.
Solving Courtney Love's Problems, too... (Score:2)
I think one of the solutions is for music artists to start releasing their works as lower-quality (FM radio quality) freebies, and to sell their own CDs and merchandise on-line, along with high-quality MP3 releases.
I'd love to be able to sample a ton of music for free, even at FM quality. And I'd be more than willing to pay even a buck a song, if I got it in CD-quality format, ready-to-burn. And I'd *LOVE* to be able to put together custom CDs of an artist's work and have them mail it to me.
And for the FM-quality stuff, I'd even be willing to toss money at them, as long as it was optional donations.
The music artists would benefit *greatly*. They currently get something like twenty cents on every CD sale. Selling me one song is worth five times that!
How do they get known, though? By offering their music for free, and by setting up thematic radio stations. Play the popular artists, but sneak in the newbies.
It's all completely possible to do *right now* -- all it takes is a good, coordinated effort that isn't aimed at ripping the artists off. They've been stung enough to be *really* cautious of pie-in-the-sky BS artists.
An open-community project would probably get a bunch of them interested, for starters...
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PayPal making money? I doubt it. (Score:2)
Don't get me wrong, I think the idea can work. I just don't think they're making money yet. I also wonder if they will ever be truly international, being based on credit cards and such. Unlike e-gold [e-gold.com], they have to be able to chase down cases of credit-card fraud and suchlike.
Re:And the problem is? (Score:2)
Sorry, I don't buy it. Your example, Amazon, uses brick and mortar. The web side is the front end, it's the back end that brings in the money because it's the back end that gives people products.
What you're not seeing is how quickly technology can develop to take care of piddling details like handling Amazon-like loads. A few years ago most people were on 14.4 modems, now most people are on 56K- or would that be cable? Information _can_ be free and it's rather startlingly absurd to claim the opposite. Go tell the FSF *g* now there's an outfit that's made a difference with only a very old-school web site. Consider how much it cost to send 20 gigs of data across the Arpanet with how much it costs now to send the data five times as far and God knows how much faster. You _cannot_ behave like information is coal or ore- it is much more slippery than that, under some conditions it can proliferate madly and span the globe.
I admit I am not a dotcom *g* I think the classic dotcom phenomenon was silly greedhead ridiculousness and I am happy they are all going broke. You're trying to suggest that only by throwing the financial resources of a Big Studly Company at a problem can you get any meaningful result (beyond just some guy and his little files, or whatever). You might want to look at not me- but Gnutella- and reconsider. The connectivity of the net is cheap- the _electrical_ power sucked up by all the little computers is staggering, but the information exchange? That's tiny, slippery, hard to even quantify unless you're filling the pipe, and there are so many pipes... and every day we roar onward devising new consumerware with more horsepower and bigger tires and selling it to their egos. You are probably sitting at a computer that totally stomps what most of the _big_ sites ran when the Internet sprang from Al Gore's forehead ;) now, what will it be like some years down the road when Joe Average's home computer rivals what Amazon runs now- and can handle a comparable network load? Amazon is already worldwide- there is no more unless they start selling to Mars. All that's left is for that technical capacity to take the orders of the whole internet... to come to the home. It might be a great time to be a cottage industry- with the technical capacity, the CPU, the network, the programs to handle that sort of full dotcommage trickling down to where regular people have them to play QuakeIIII^HDoom. *g* ...or do you think that the bytes needed to send an order from one computer to another will also follow Moore's Law?
So whats the problem? (Score:2)
You have the average personal homepage which doesn't make any money now and probably never will because it wasn't designed to. Nothing changes, no problem.
You have the megaconglomerate media services which rely on banner ads for revenue. If they lose too much money on the internet, maybe they'll be forced to make an economic decision to quit using the internet. I'm really crying over this. No problem.
It really doesn't matter if you CAN make money on the internet. The internet was not founded to serve commercial purposes. If a business can discover an honest way to use the internet to its economic advantage, great. If the scam artists and porn kings are making a killing, hey... there were always suckers in the world, its unlikely they'll die off very soon.
The biggest issue here is the seeming inability to sell information. I don't necessarily see this as a problem. 99% of the information out there has been provided on a completely voluntary basis. I provide a tidbit to the world, as do hundreds of millions of other people. Those tidbits add up to a great wealth of information.
If the cost to run a site gets too large, there will be a source of revenue available. It might not be as obvious as banner ads, but if you have a large number of eyeballs, you WILL be offered compensation. I run a relatively low volume website that gets at most about 20,000 hits a year and I have been offered several jobs for over $50,000/year. I consider that to be a revenue source. In fact, there may be other economic options that have not yet presented themselves in massive numbers. The internet of today barely resembles what it was a mere 5 years ago. The next 5 years could have even more dramatic implications.
Also, remember the basic rules of supply and demand. Wherever there is demand for something, there WILL be a product offered, and there will be competition. And it may very well not resemble anything we've experienced over the last 5, 10, 20, or 100 years. Look around you today, you can get computers for free, internet service for free, DSL for free, long distance phone service for free.
You can spend $100 on a computer, pop off the case and make a few minor changes and you've just quadrupled the value of the machine. Then the company that should be losing money like crazy over this, thinks it over and decides that this isn't a problem and figures it might make them even more money in the future. Imagine that.
These things are happening because the world is changing. For many years the world was, for all practical purposes, held back. Held back by governmental regulations, excessive taxes, etc. However, the internet found a new life and has literally redesigned the entire world economy in such a short period of time that the governements of the world have been having a really hard time even attempting to keep up with it.
Record companies never saw mp3's coming. Now they're screwed and the industry as a whole has been changed forever. They might attempt to recover to some extent, but by not looking ahead, and not paying attention to which way the wind was blowing, they lost their opportunity. And they're not the only ones. MANY businesses are having the same problem. You HAVE to adapt. And the internet is probably only the first step.
This really has nothing to do with making money off of your website. The internet's affect on the future is so much more complex than a simple profit for information served.
-Restil
my suggestion... (from kuro5hin.org) (Score:2)